Gold To Fall To New Lows
Alexandros Yfantis | Oct 14, 2013 07:00AM ET
Gold is preparing for a big downward move that will probably unfold into a very fast and sharp decline to new lows towards 1150-1080. If you follow our past analysis on Gold, you would have noted the difficulties it has met near the resistance of 1430-50 and the increased probability we were giving for a trend reversal. The entire upward move from 1180 is over and it looks like a corrective pattern and not an impulsive one. The upward move from 1180 is clearly a three wave correction and downtrend that pushed prices from 1800 to 1180 are now ready to restart the selling pressures.
In the monthly chart above you can see that prices have broken out of the upward sloping trend channel and after back testing it, they pull back down. Prices are expected to end this downward move near the green zone of support or just above it at the 50% Fibonacci retracement at 1080$.
Looking at the shorter term chart above, you can clearly identify the head and shoulders pattern that is in play. Gold not only has made increased volume near the highs, but also the reversal of prices combined with the three falling peaks and the break of the neckline, make things for bulls very difficult as there are plenty bearish signs pointing towards 1140 and lower. Concluding we are bearish as long as trend remains down. For more help trading Gold become a member today.
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